Commerzbank’s Charlie Lay reports that the Singapore Dollar (SGD) has maintained stability against the US Dollar (USD), with the USD/SGD pair trading around 1.2920 and remaining within a 1.29–1.30 range for the past month. The SGD Nominal Effective Exchange Rate (NEER) is estimated to be approximately +0.8% above its mid-point, and the +/-2% NEER band suggests a broader potential USD/SGD range between 1.2780 and 1.3300, with the mid-point at 1.3040 [1].
Recent economic data shows that Singapore's May retail sales rose by 3% year-over-year, which was below the Bloomberg consensus of 4.7% and down from 5.4% in the previous month. On a three-month moving average basis, retail sales growth moderated to 4.3% year-over-year from 6.2% in April. Excluding autos, retail sales growth eased to 3.7% from 4.5% previously, and the three-month moving average slowed to 3.7% from 6.3% [1].
Despite the moderation in retail sales, the data indicates continued economic expansion, supported by a healthy labor market. Consumer demand is expected to remain resilient and complement a strong external sector, which is benefiting from AI-related exports. The next significant data release is the advance Q2 GDP report, expected next week, with projections for firm growth around 5.6% year-over-year compared to 6.0% in Q1. The manufacturing sector, particularly electronics production, is anticipated to be a key driver, with industrial output expanding by 14.8% year-over-year in April-May versus 8% in Q1 [1].
Based on these trends, Commerzbank suggests that Singapore could see around 5.8% economic expansion in the first half of 2026. There is also the possibility that the government may revise up its official 2024 GDP growth forecast of 2-4% when the final Q2 GDP figures are released around mid-August [1].
CONCLUSION
The Singapore Dollar remains stable within a narrow trading range, supported by steady economic fundamentals and a resilient labor market. While retail sales growth has moderated, strong manufacturing and external demand, especially from AI-related exports, underpin positive GDP expectations. Market participants are watching for the upcoming Q2 GDP release, which could prompt an upward revision to Singapore's official growth forecast.